1. Global Problems--Regional Implications Presentation to the 5 th Vienna Economic Forum: Investment Possibilities in the Countries from the Adriatic to the Black Sea and the Caspian Region-Take the Real Chance Theodore Ahlers Director of Strategy and Operations Europe and Central Asia World Bank November 10, 2008

2. 2 We are experiencing the first global economic crisis since the 1930s

3. 3 Many countries have large current account deficits, often funded through extensive bank borrowing.

4. 4 Continuation of the expansion of credit to the private sector is uncertain

5. 5 Perceptions of risk in countries of the region, is often higher than in other emerging markets. Note: Comparator regions are the median values for the following groups: Emerging Asia (Indonesia, Korea, Malaysia, and Thailand) and Latin America (Argentina, Brazil, Chile, Colombia, Mexico, and Peru). Source: Bloomberg.

6. 6 The crisis will result in a period of slower global growth, complicating investment in the region. Easily available foreign credit gone, for now. Public-private partnerships more challenging Tighter fiscal constraints More rigorous cost-benefit analyses for public investment. Large human capital & infrastructure investment requirements in the region.

7. 7 Governments must not jeopardize long-term growth -- social investments are of critical importance.

8. 8 Need better targeting of funds for the poor

9. 9 Employment of women and Roma populations an untapped resource

10. 10 Families with debt in foreign currencies at risk

11. 11 Investment Climate issues even more important Note: Economies are ranked on their ease of doing business, from 1-181, with first place being the highest. Regional aggregates are the median values of the following groups: EU10 (Bulgaria, Czech Rep, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Rep, and Slovenia); Middle Income CIS (Belarus, Kazakhstan, Russia, and Ukraine). Source: Doing Business 2009.